6. The IPO Scam

The Control over Capital Issues was banned soon after the entry of international organizational investors and the market saw heavy bull trend, which resulted in the revival of the secondary market from the previous scandals. This ban unlocked the doors for scandals in Initial Public Offerings (IPO). This scam was executed in two parts – firstly, it can be carried out by the firms who increased their market costs to gain profits, and secondly the agreement of small time merchants, CAs, investment bankers and traders could start new firms and heave public capitals. This type of IPO scam ran for three years i.e. from 1993-1996, and finally sank when the registered firm’s costs started deteriorating.